Krabbe leukodystrophy (KD) or Globoid Cell Leukodystrophy is a severe lysosomal storage disorder that mainly affects infants in the first months of life and is usually fatal within a couple of years. KD presents with irritability and motor deterioration, which progresses to overall decline and death due to demyelination and neurodegeneration in the central and peripheral nervous system (CNS and PNS). KD is due to recessive mutations in galactosylceramidase (GALC) a lysosomal enzyme that catabolizes the major myelin lipid galactosylceramide and the cytotoxic lipid psychosine. Psychosine accumulates in patients and is toxic to myelinating glia and neurons causing demyelination and neurodegeneration (psychosine hypothesis). Although myelin is affected in KD, GALC is present in all cell types and other cells, such as neurons and macrophages, may be important and involved early in the disease. There is no cure for KD, but Hematopoietic stem cell transplantation (HSCT) improves symptoms presumably by cross-correction: the uptake by mutant cells of GALC secreted by stem cell-derivatives. Patients who receive HSCT eventually deteriorate, possibly due to insufficient PNS cross-correction. This has not been evaluated experimentally and in general the PNS is emerging as an important KD component that is not targeted by available therapies. The Twitcher mouse is a spontaneous model of the disease that has been used extensively and recently used to show that HSCT, substrate reduction and gene therapy have synergistic beneficial effects, suggesting multiple disease mechanisms. Despite these advancements, many fundamental aspects of KD pathogenesis are still unknown. For example, are KD neurons and macrophages involved in a cell autonomous manner? Is cross- correction efficient and does it occur in all cell types in vivo? Do all cells produce psychosine, or only certain cell types? Besides psychosine toxicity, are other mechanisms involved? We recently developed a conditional Galc allele and have deleted Galc in various cell types in the CNS and PNS. In this proposal, we will use the PNS, due to its relative simplicity and anatomical isolation, to answer the fundamental questions raised above. Based on a strong set of preliminary data, we postulate that cross- correction does not occur efficiently in vivo, that myelinating glia produce psychosine, and that deleting GALC has a cell autonomous effect in each cell type, likely by perturbing lysosomal function and autophagy. Our results will reveal fundamental aspects of PNS biology and help to understand the pathomechanisms of KD and the limitations of HSCT, which will allow the development of better therapies for KD and other lysosomal, neurodegenerative and demyelinating diseases.